The term “digital wallet” is increasingly being used to describe mobile phones, especially smartphones that store an individual's credentials and utilize wireless technologies such as near field communication (NFC) to carry out financial transactions. Such credentials may include information regarding the individual's bank account, credit card, driver's license, health card, loyalty card, and other ID documents. When making a purchase using the digital wallet, the credentials can be passed to a merchant's terminal wirelessly via NFC.
A barcode is an optical machine-readable representation of data in various formats including binary data, alphanumeric data, Kanji symbols, etc. A one dimensional (1D) barcode represents data by varying the widths and spacing of parallel line segments. A two dimensional (2D) barcode may use rectangles, dots, hexagons, and/or other geometric patterns in 2 dimensions instead of the parallel line segments. A QR code (i.e., Quick Response code) is a type of 2D barcode that typically consists of black modules arranged in a square pattern on a white background. Barcodes may be scanned by special optical scanners referred to as barcode readers.
Point-of-sale (POS) systems are beginning to be set up around the scanning of barcodes from a consumer's mobile device screen. The barcodes represent the payment information stored in a digital wallet installed on the consumer's mobile device. When the consumer makes a purchase, the payment information is retrieved by the POS system to complete the sales transaction. Typically, a POS system accepts only a single format of payment information, such as magnetic strip on a credit card, NFC transmission from a digital wallet, or optical scanning from the barcode displayed on a smartphone.